Are we on a Seller’s market?

One key indicator this spring is market inventory. This entails not only the number of houses officially for sale at a given time but how long it will take those properties to sell at their current pace. The fewer the homes, the more likely they are to draw offers and the shorter the inventory cycles…In plain words, the fewer the inventory, the more pricey the market gets!

Observers of real estate say that six months of housing inventory represents a balanced market. Anything less than six months tilts the market toward sellers. A supply exceeding six months leans to buyers.

Over the last four years, the number of homes for sale has dropped 35%, and recent reports put the housing inventory cycle at about 4.4 months.  Homes on the market should, therefore, draw a number of offers, and this competition for available housing should drive up prices.

However, what bodes well for sellers is not so for buyers. For example, the inventory of starter homes, or those that are generally less expensive, have declined, making it difficult for buyers to find a property. “Prices of premium homes have actually started to grow further and further out of reach, so if you own a trade-up home, and say you want to buy and move up to a premium home, it’s much more difficult to do so, just because it’s more expensive.”, says Ralph McLaughlin, Chief Economist for Trulia.

Reports of a tight inventory this spring were confirmed by Svenja Gudell, Zillow’s Chief Economist, who said, “There are a lot of economic forces at work behind the scenes that will have a big impact on housing as we enter the busy home-shopping season. Low inventory is a factor in almost every market, so buyers should be prepared for a limited selection in the months to come.”

Incorporating National Lending Services in your operation. See how it can be done

If you consider yourself a Real Estate Professional, whether you are a broker, a sales person, an attorney, or you are part of a multi-service group that assist people and families on a wide range of needs, some of the Real Estate nature, then you have noticed already the limitation,….sometimes frustration, of having a 3^rd party doing the mortgage for your client. Be part of a Depository Federal Bank may create for your services portfolio a whole new world of opportunities.

Sandra, used to work as an associate broker for a Real Estate franchise branch in New Jersey. For over 5 years, she was serving the Latino community in her county. As a quality-service oriented professional, she was soon getting new referrals from previous satisfied clients and doing new transactions for some repeating clients. “I knew my service was excellent and the way I was conducting my operation was appropriated, but my challenge was always with the lenders.. the missing part”, without getting into the obvious issue of not making the income generating by the loan itself, Sandra was also suffering the eternal issue of SEPARATION of service caused by the need of outsourcing the loan process out her reach and control. Even if she was doing a great job as Realtor, the many issues generated by the lender affected her clients’ overall perception of quality-service.

Even if the lender you refer to is a nice person who is diligent and serious about his/her job. Even if the lender is an understanding person about your marketing efforts and works there sometimes as an sponsor, the true is that you are outsourcing your clients’ loans and you are losing control over critical features of the loan, over the interest rate, and over the compensation that comes from it…special loans like reverse mortgages, construction, rehabs, co-ops, out state loans, etc would be most likely out your reach.

As the result of the Housing and Recovery Act of 2008, HERA, enacted to help in the rehabilitation of the America’s residential housing market, its Title V, or the Secure and Fair Enforcement for Mortgage Licensing Act, SAFE, entered in vigor, every loan originator in the Country became subjected to a State license requirement. A long and demanding process that requires a pre-license course, a tough test (25% passing rate) and a 20 items or so checklist for licensing that could altogether last up to 8 months. This is no true is you become a registered loan originator for a Federal Chartered Bank.

A federally chartered bank is a financial institution authorized and regulated by the federal government rather than the state government and its supervision is by the Office of the Comptroller of the Currency. This kind of banks are exempt of the state license requirement, its access to mortgage programs is near to unlimited, their federally pooled funds give them access to the same rates of the major national depository banks, most times 0.5% less than the best state mortgage bank offer, and this kind of banks have access to the 50 states and can originated loans in each of them.

The business opportunity jumps out after this article, should you’d like to incorporate a new national level lending service that can compete with the biggest players and while in doing it, gaining the full control over that missing part that was present at your operation before. Let us know your opinion!!, write a comment or a private email to Blog@ProHomeNetworkAmerica.com

Sources: Office of the Comptroller of the Currency, The National Association of Realtors, and the NMLS Resource Center.

Foreign Real Estate Buyers, reached record $104B in U.S.

According to the National Association of Realtors, sales of U.S. residential real estate to overseas buyers reached a record $104 billion last year. $104 Billions or about 8 percent of total existing home sales. While the number of properties sold slowed to 209,000 from 232,600 last year, buyers acquired more expensive properties, which brought up the sales total.

Chinese were the top foreign buyers last year, with buyers from China, Hong Kong and Taiwan accounting for $28.6 billion in sales. Canada ranked second, with $11.2 billion, followed by India with $7.9 billion. Overall, Florida was the top state for overseas real estate buyers, accounting for 21 percent of all U.S. sales to foreign buyers. California ranked second, with 16 percent, followed by Texas with 8 percent and Arizona with 5 percent. The top four states accounted for half of overseas buying.

Europeans and Canadians were attracted to Florida and Arizona, while California and Texas were favored by buyers from Asia. Buyers from Latin America, including Mexico, preferred Texas and Florida.

The report said that U.S. real estate remains a relative bargain compared to other global cities favored by the wealthy. For instance, a condo costing $1.6 million in New York would cost more than $4 million in Paris and $2 million in Moscow.

Fully 46 percent of foreign buyers planned to use their properties as a primary residence, while 20 percent plan to use as them for rentals and 15 percent plan to use it them as vacation homes.

Foreign buyers were focused on higher-end homes. The media purchase price for overseas buyers was $499,600, nearly twice the national media purchase price of $255,600. Foreigners are also paying more than they were last year: The mean price paid by overseas buyers jumped 26 percent over the previous year. Most favored the suburbs over the city and most favored single-family detached homes over apartments.

Reverse Mortgage Unveiled

As a mortgage professional, how many times have you been questioned by others,…or even by yourself…, about Reverse Mortgages, are they any good for borrowers, are there any myths about them. Let’s take a look of their key aspects in a simple and summarized way.

What is a Reverse Mortgage?

A reverse mortgage is a loan available to homeowners, 62 years or older, that allows them to convert part of the equity in their homes into cash. The loan requires no principal & interest monthly payments, on contrary, a homeowner can tap into the approved equity disbursement in a way of fixed monthly checks, a lump sum, a line of credit or a combination.  The most popular reverse mortgage program is known FHA’s HECM, or Home Equity Conversion Mortgage.

Features

Generally, the IRS does not see the HECMs’ income a taxable one, nor a dis-qualifier for Social Security or Medicaid benefits- some cases require the homeowner’s attorney or CPA analysis.

The value of the house is used to determine eligibility, rather than the income of the homeowner.

The HECM income ends when the home equity term is reached, the home is sold, the house is not the main principal home for 12 consecutive months, or the last borrower passes away.

Homeowners can keep the title to their homes until they pass away, move, sell their home, or reach the end of their loan term.

Lenders cannot go to your heirs for repayment of your loan if the house sells for less than what was borrowed. In most cases, the home must be sold to pay back the reverse mortgage and there “may not be” any money left for the heirs.

Interest rates can be fixed or adjustable, but most are adjustable rates. Reverse mortgages’ have variable rates that move up and down with the market conditions.

All accumulated interest may be deducted of the homeowner taxes at the conclusion of the loan.

Money can be used for any purpose such as for home repair and maintenance, long-term care, medical needs, or paying debt.

As the owner’s age increases and the home equity increases, the amount that can be borrowed increases.

The homeowner is still responsible for paying property taxes, paying homeowner’s insurance, and maintaining and repairing the home. If not, the loan becomes due.

The Worst Cities For a Real Estate Agent

The cities that aren’t good for real estate agents are much more diverse with just about every region of the country represented. However, a lot of them are concentrated in the South. See what are the worst if you are thinking in becoming an agent there. Here is the Top 10 Rank.

With the exception of Dayton, OH, Springfield, MO and Binghampton, NY, all the top 10 worst cities for real estate agents are located in the States of South and North Carolina, and Florida. The cities of Spartanburg, SC, Tallahassee, FL, Pensacola, FL and Charleston, SC, Springfield, MO experienced drops in the home price, being the later city the one where home prices dropped the most with 15% of annual change.

Pensacola, FL and Columbia, SC were the worst paid for real estate agents. Notice that a real estate agent in Pensacola, FL sales an average of 5.82 homes/yr to make $30k per year, while agents in Columbia, SC need to sale 13.75/yr to make $34k due to home prices.

In contracts, we offer you the top 10 rank of the best cities to be a real estate agent. Pay attention to the columns in the following chart and compare them against the worst cities chart above.

Source: Zillow, National Association of Realtors, Labor Department.